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[Gene GeRue <genegerue AT ruralize.com>]

On May 24, 2010, at 9:20 AM, Clansgian AT wmconnect.com wrote:

> This area isn't particularly hard hit as far as the overall real estate 
> bust goes, and yet the number of long term for sale signs is legion.  Also 
> (and 
> this surprises me, maybe someone can enlighten me) I know of half a score 
> of properties that have been vacated due to foreclosure and yet there are 
> no 
> 'for sale' signs on the properties.  I am told this is not uncommon.  Why?

James, the magnitude of the foreclosure economy is so great that banks, 
lenders, owners of notes, owners of bundles of notes, etc., are still 
striving for a standard model of how to deal with huge numbers of borrowers 
who are upside-down on their mortgages. Many of today's bankers are clueless 
about this new phenomenon--I read yesterday the words of a Phoenix bank 
president who "just don't understand borrowers who are walking away from 
their houses; they are willingly doing bad things to their neighborhoods, 
lowering the values." She is showing her age--bankers have always had to make 
a profit but in the past they were local and subject to community reaction. 
Todays bankers make decisions based purely on business profit and loss. It is 
at best disingenuous to decry borrowers who do the same.

Part of the complexity of finding the best business model lies in this fact 
that borrowers have become more sophisticated and less predictable in their 
behavior. From viewing homes as homes many have evolved to seeing homes 
primarily as investments. Socio-economic values have changed. Today, many see 
foreclosure condition response as a business decision rather than a moral 
decision. Such decisions are also impelled from the diminishing state of the 
economy

The many bank-owned properties lacking for-sale signs are, I think, due to 
this indecision caused by the lack of a business model that deals with the 
current borrower mindset. I see it as evolutionary justice, the common people 
getting back at big money profiteers.

Gene